Why do the rich buy so much life insurance?

Life Insurance Quotes: www.MintcoFinancial.com

Call to speak with one of our Independent Advisors: 
813 964 7100 or 716 565 1300


The tax law makes life insurance tax-free. This special law gives everyone, but mostly the rich — who are always in the highest income tax and estate tax brackets — an easy way to create more wealth. Tax-free. No risk. Guaranteed.

1. Insurance premiums are deductible for estate tax purposes. For example, suppose you pay $500,000 in premiums (from the day you bought a $2 million dollar policy to the day you die). The $500,000 is gone, can’t be taxed by the estate tax monster. Result: for a net $300,000 cost ($500,000 premium less $200,000 of estate tax saved) your family gets $2 million tax-free (guaranteed); a great tax-advantaged investment.

2. At death.

A. So we have a $2 million death benefit, while the premiums paid were $500,000; leaving an excess of $1.5 million, which is a clear profit. Yes, this profit is tax-free; no income tax.

B. The $2 million death benefit can be structured (easy to do) to be estate tax-free.

3. And even after death.

Say you die with a $10 million policy on your life owned by an irrevocable life insurance trust (ILIT); your wife is beneficiary. No estate tax at your death. Your wife dies many years later. The amount in the ILIT has grown to $12 million. Every penny of that $12 million will pass to her heirs (probably your kids and grandkids) tax-free. No estate tax. No income tax.

Life Insurance quotes:www.MintcoFinancial.com

Call us at 813 964 7100 or 716 565 1300